Financial Resilience in Australia

Financial resilience is being able to bounce back from a financial shock. There are a number of things that help people's financial resilience including income, savings, a willingness to seek financial advice, connections with family and friends, support from community and government organisations and access to appropriate banking products like credit and insurance.

This report found that 2.1 million people in Australia are experiencing financial stress.

The Financial Resilience in Australia report also found:

Just one in two Australians are prepared for a rainy day, with three or more months’ worth of savings to provide a buffer for unexpected costs;

One in six Australians are finding it tough to meet the necessary costs of living;

Australians in financial hardship are also paying the most to access small amounts of credit, with one in five reporting they had used high cost credit such as payday lenders.

Financial resilience is defined as being able to ‘bounce back’ from a financial shock. This includes having savings and access to appropriate credit, as well as support from family, friends, and community and government organisations.

One in eight adults in Australia (12.6 per cent) experienced severe or high financial stress during the past year, up from 11.1 per cent. This means that they are less able to bounce back when things go wrong, such as a higher than expected utility bill or a broken washing machine.

More than half (56.3 per cent) felt some level of financial stress compared with 53.2 per cent a year earlier. This group had more resources to draw on than those in severe or high financial stress. However, they could still be exposed by major financial shocks like losing a job, having a baby or a relationship breakdown.

Less than one in three (31.2 per cent) were financially secure, down significantly from 35.7 per cent in 2015.

Now in its second year, the report reveals just how financially vulnerable many Australians are when they experience a bump in the road and need a helping hand.